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3 Big Things Today, May 2, 2022

Soybeans, Grains Lower Overnight; Speculators Curb Net-Long Positions.

1. Soybean, Grain Futures Plunge in Overnight Trading

Soybeans and grains were lower in overnight trading as investors who had bet on higher price exit the market.

Investors reduced their net-long positions in soybeans, corn, and hard-red winter wheat last week, with many liquidating their positions and booking profits.

Bean futures had been up recently on adverse weather in South America and amid rising cooking oil prices.

Palm oil futures had been rising after Indonesia, the world’s largest shipper of the oil, announced an export ban.

Grains had been rising amid the ongoing Russian attacks on Ukraine. Wheat futures also had been increasing on dry weather in the U.S. southern Plains.

Fundamentally, not much has changed in recent days.

Concerns about waning demand have persisted as lockdowns in China due to increased COVID-19 cases have rattled markets, while wheat buyers are turning to India for cheap supplies.

Rain has been falling in parts of the northern Midwest with parts of the Dakotas, Minnesota, and Nebraska getting as much as six times the normal about of precipitation in the past week, according to the National Weather Service’s precipitation page.

It’s still extremely dry in parts of the southern Plains, where the U.S. hard-red winter wheat crop is attempting to grow, however, as little to no rain has fallen in some areas in the past week, NWS data show.

An exception would be a small sliver of the north Texas panhandle where a rain event brought moisture to the area.

Investors will keep an eye on today’s crop-progress report to see how the recent rains in the northern Corn Belt have, if at all, affected planting.

Soybean futures for July delivery dropped 18½¢ to $16.66¼ a bushel overnight on the Chicago Board of Trade. Soymeal lost $4.50 to $427.80 a short ton, while soybean oil futures plunged 1.77¢ to 82.41¢ a pound.

Corn futures lost 12¼¢ to $8.01¼ a bushel.

Wheat for May delivery dropped 10¢ to $10.45¾ a bushel while Kansas City futures fell 11½¢ to $10.94¼ a bushel.

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2. Speculative Investors Cut Bullish Bets on Corn, Beans

Money managers reduced their net-long positions, or bets on higher prices, in corn and beans last week, according to the Commodity Futures Trading Commission.

Investors held a net-338,594 corn-futures contracts in the seven days that ended on April 26, the CFTC said in a report.

That’s down from 362,901 contracts a week earlier, and the smallest bullish position since the week that ended on March 1.

Speculators reduced their net-long positions in soybeans to 166,688 futures contracts last week, down from 171,365 contracts a week earlier, the agency said.

In wheat, hedge funds and other large investors held a net-44,881 hard-red winter contracts, down from 49,965 contracts a week earlier and the smallest such position since March 15.

Investors also held a 19,970 soft-red winter wheat futures contracts as of April 26. That’s up from 14,724 contracts the previous week, the CFTC said in its report.

The weekly Commitments of Traders report from the Commodity Futures Trading Commission shows trader positions in futures markets.

The report provides positions held by commercial traders, or those using futures to hedge their physical assets; noncommercial traders, or money managers (also called large speculators); and nonreportables, or small speculators.

A net-long position indicates more traders are betting on higher prices, while a net-short position means more are betting futures will decline.

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3. Thunderstorms Forecast For Parts of Iowa and Nebraska

Thunderstorms are possible this afternoon into this evening in parts of western Iowa and southeastern Nebraska, according to the National Weather Service.

In extreme eastern Kansas and central Missouri, meanwhile, some precipitation and strong winds are forecast, the agency said.

“Showers and thunderstorms are expected throughout the day today,” the NWS said in a report early this morning. “Locally heavy rainfall is possible with these storms. A few of the storms south of I-70 this evening may produce strong winds up to 60 mph and large hail to the size of quarters.”

In western Kansas, meanwhile, a freeze watch will take effect late tonight into Tuesday morning with temperatures falling as low as 31˚F. In some areas, temperatures may drop as low as 28˚F., the agency said.

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